Failing grade for Australian multi-managers
Despite claims that multi-manager products will perform regardless of market conditions, Standard & Poor’s peer group review of Australian equity multi-managers has found they have struggled to meet their investment objectives over an extended period of time.
S&P awarded five investment strategies three stars and downgraded two others following the review, which covered four managers offering seven strategies.
According to S&P, it’s widely accepted that timing when to invest in growth or value style funds is a very difficult thing to do, as both perform differently through the market cycle.
That said, multi-manager products are designed to take this timing burden away from investors by “constructing funds using the best managers from each style persuasion”.
“Aggregating these portfolios should result in a fund that is typically style-neutral, but that aims to benefit from the superior stock-picking skills of the underlying mangers over time.”
Despite this, S&P’s ‘Australian Equity — multi-manager peer group — 1 Equities — Quant review’ found many multi-managers struggled to meet their investment objectives over extended periods.
The strategies awarded three stars included Russell’s Australian share and opportunities funds, MLC’s growth and value style strategies, and Customer Choice’s Australian share fund. S&P rated both Advance’s and MLC’s Australian share strategies two stars.
AUTHOR
George Liondis
Recommended for you
With HNW investors representing the largest market for alternative assets, Praemium and CoreData research underscores why this presents a compelling opportunity for advisers.
Having completed the successful integration of Diverger, Count has upgraded its forecast for expected synergy benefits achieved by the acquisition by a third.
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
